Nifty ends below crucial 7,450 level

The fifty stock index - Nifty - ended lower on Friday on account of sustained selling by fund and retail investors. Weak closing in Asian peers too weighted the sentiments.  Sentiment remained down beat on report that with the report that United Nations has downgraded its GDP growth forecast for India for 2016 to 7.5 percent from 8.2 percent estimated earlier, largely due to slow progress in implementing reform policies. Besides, weak trade in Indian rupee also dampened the markets.  On the global front, Asian markets ended mostly in red after continued falls in the price of oil and poor Chinese bank lending figures undermined confidence. European stocks fell, with energy company shares taking another beating as oil prices dropped below $30 a barrel, putting the market on track for a third straight weekly decline.

Back home, Indian equity benchmark made a flat-to-positive start tracking sharp recovery in US stocks in overnight trades. However, market turned into negative territory and traded near its neutral line for most part of the day’s trade, as investors remained cautious with Sebi Chairman U K Sinha’s statement that the Chinese slowdown concerns have posed a new challenge for India and raised uncertainty over the country’s growth. Meanwhile, foreign portfolio investors sold shares worth Rs. 1221.97 crore yesterday, as per provisional data. Thereafter, sharp selling was witnessed in the last leg of trade that breaching Nifty below its 7450 level.   

The top gainers from the F&O segment were Bharat Petroleum Corporation, MindTree and Tech Mahindra. On the other hand, the top losers were Wockhardt, Jindal Steel & Power and TV18 Broadcast. In the index options segment, maximum OI was being seen in the 7500-8300 calls and 7100-7700 puts. In today's session, while the traders preferred to exit 7500 put, heavy buildup was seen in the 7100 put. On the other hand, traders exited from 7900 Call, while 7600 call witnessed considerable OI addition.   

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 4.35% and reached 19.41. The 50-share Nifty was down by 99.00 points or 1.31% to settle at 7,437.80.   

Nifty January 2016 futures closed at 7446.25 on Friday at a premium of 8.45 points over spot closing of 7,437.80, while Nifty February 2016 futures ended at 7466.35 at a premium of 28.55 points over spot closing. Nifty January futures saw addition of 0.26 million (mn) units, taking the total outstanding open interest (OI) to 22.63 million (mn) units. The near month derivatives contract will expire on January 28, 2016.                 

From the most active contracts, SBI January 2016 futures traded at a premium of 1.20 points at 184.50 compared with spot closing of 183.30. The number of contracts traded were 25,784.           

ICICI Bank January 2016 futures traded at a discount of 0.50 points at 224.90 compared with spot closing of 225.40. The number of contracts traded were 17,220.                     

Axis Bank January 2016 futures traded at a premium of 2.45 points at 375.30 compared with spot closing of 372.85. The number of contracts traded were 20,228.                        

Reliance Industries January 2016 futures traded at a premium of 0.45 points at 1073.05 compared with spot closing of 1,072.60. The number of contracts traded were 26,217.          

Infosys January 2016 futures traded at a premium of 3.60 points at 1143.60 compared with spot closing of 1,140.00. The number of contracts traded were 17,150.    

Among Nifty calls, 7600 SP from the January month expiry was the most active call with an addition of 1.23 million open interests. Among Nifty puts, 7400 SP from the January month expiry was the most active put with an addition of 0.10 million open interests. The maximum OI outstanding for Calls was at 7700 SP (6.85 mn) and that for Puts was at 7300 SP (6.55 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7527.10 --- Pivot Point 7477.20 --- Support --- 7387.90.       

The Nifty Put Call Ratio (PCR) finally stood at 0.86 for January month contract. The top five scrips with highest PCR on OI were United Breweries (2.64), Mahindra & Mahindra Financial Services (2.15), Bharat Petroleum Corporation (1.03), Infosys (1.01), and Tata Consultancy Services (0.99).    Among most active underlying, Reliance Industries witnessed a contraction of 1.57 million of Open Interest in the January month futures contract, followed by Infosys witnessing a contraction of 0.02 million of Open Interest in the January month contract; Wockhardt witnessed a contraction of 0.41 million of Open Interest in the January month contract, State Bank of India witnessed an addition of 0.34 million of Open Interest in the January month contract and Reliance Infrastructure witnessed a contraction of 0.14 million units of Open Interest in the January month's future contract.